Must Keep Citigroup Woes in Perspective: UK's Darling

Reuters

Monday, 5 Nov 2007 | 7:29 AM ETReuters

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British Chancellor of the Exchequer Alistair Darling said on Monday the global banking industry was experiencing great uncertainty, but it was vital to keep the problems of U.S. bank Citigroup in perspective.

"We are experiencing an unparalleled period of financial uncertainty caused by the problems in the U.S. housing market," Darling told BBC radio.

"I believe that we can get through that...our banking system is basically strong and...we have a very strong economy."

The head of Citigroup -- the largest U.S. bank -- resigned on Sunday, taking responsibility for spiraling losses at the bank on subprime-related investments. Citigroup said it may suffer an $11 billion write-down in addition to losses already announced.

Darling said Britain's banking sector and economy would weather the storm.

"I do think you need to keep this in perspective," he said. "Many banks in this country have very strong balance sheets after years of making very good profits."

"The British economy is strong, it's been growing now for 10 years," he added. "That's why I believe that despite this international uncertainty, which started in the problems in the U.S. housing market, there are grounds for believing that we will get through this. We have a strong economy, its momentum will carry us through."